Wheat Falls on Signs of Russian Quota Growth
November 30 2020 - 3:54PM
Dow Jones News
-- Wheat for March delivery fell 3.5% to $5.85 a bushel on the
Chicago Board of Trade Monday in reaction to indications Russia may
increase the amount of wheat allowed to be exported next year.
-- Soybeans for January delivery fell 2% to $11.68 1/2 a
bushel.
-- Corn for March delivery fell 1.8% to $4.26 a bushel.
HIGHLIGHTS
Quota Qualms: The Russian agricultural ministry says that it may
increase its planned wheat quota to 17.5 million metric tons from
15 million tons, which would be applicable for Russian exports
through June.
"This could raise 2020-21 Russian wheat exports above 40 million
metric tons," said AgResource. "The move is a political swipe at
the Russian livestock and milling industry that were lobbying for
an export duty or reduced quota to pressure domestic Russian grain
prices."
Rainy Days and Mondays: Grains futures trading on the CBOT fell
overnight and remained lower throughout the day in reaction to
rainfall arriving for beleaguered South American crops, according
to Karl Setzer of AgriVisor.
"Long-range forecasts still indicate drier-than-normal
conditions for the next two weeks, but thoughts are these rains
will at least minimize crop loss at this time," said Mr.
Setzer.
INSIGHTS
Unwavering Appetite: Exports of U.S. soybeans are continuing to
go mostly to China, according to data from the USDA. The agency's
latest grain export inspections report shows that of the 2.04
million metric tons inspected for export, 1.67 million tons were
destined for China. Even with data showing strong Chinese
purchasing, soybean futures are down Monday as grains traders were
again unable to push the most-active contract past the
$12-per-bushel barrier.
"The trend for beans is still higher and the outlook is the most
supportive, but there is a very large speculative long in the
market that is vulnerable to see profit-taking ahead of year end,"
said Doug Bergman of RCM Alternatives.
Pass the Ball: The Renewable Fuels Association, a trade group
representing the ethanol industry, is calling on the Trump
administration's EPA to stand aside and wait for the administration
of President-elect Biden to handle new regulations for renewable
fuels, this after the current EPA has apparently missed its
deadline to publish its final rule for renewable volume
requirements among fuel refineries.
"It shouldn't come as a surprise to anyone that EPA is missing
its statutory deadline for publishing the final rule for 2021 RVOs,
given that we still haven't even seen a proposed rule," said Geoff
Cooper, president of the RFA.
According to Mr. Cooper, a Biden administration is likely to be
friendlier for the ethanol industry, which could lead to higher
domestic consumption of U.S. corn.
AHEAD:
-- The USDA is scheduled to release its monthly grains crushings
report at 3 p.m. EST Tuesday.
-- The EIA is due to release its weekly update on ethanol
production and inventories at 10:30 a.m. EST Wednesday.
-- The USDA is scheduled to release its latest weekly export
sales numbers at 8:30 a.m. EST Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
November 30, 2020 15:39 ET (20:39 GMT)
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